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ASX 200 recovers, Redbubble sinks, Megaport jumps

The S&P/ASX 200 Index (ASX:XJO) had a strong day today. Within the index, the Megaport Limited (ASX:MP1) share price was the best performer.
The post ASX 200 recovers, Redbubble sinks, Megaport jumps appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) rose 0.8% to 7,055 points, despite being down earlier in the day.

Here are some of the highlights from the ASX today:

Megaport Ltd (ASX: MP1)

The Megaport share price went up by almost 10% after releasing its quarterly update.

In the three months to 31 March 2021, it saw 8% quarter on quarter growth of its monthly recurring revenue to $6.8 million. Total revenue went up 5% to $19.6 million compared to the second quarter of FY21. In March 2021, its customer number reached 2,117, an increase of 4% quarter on quarter. The number of ports rose 5% quarter on quarter, whilst total services went up 4%.

Megaport CEO Vincent English said:

As we enter the final quarter of FY21, we have a strong pipeline of new customers, driven by increased requirements from digital transformation initiatives. We see this as an indication that enterprises now have greater line of sight to post-pandemic normal and that overall IT budgets are improving. Our growth in ports and underlying revenue in the second half of the third quarter was strong, and we expect to see this trend continue.

Mr English went on to say that it’s on track to be breakeven on the earnings before interest, tax, depreciation and amortisation (EBITDA) level on an annualised basis, by June 2021.

Megaport was the best performer in the ASX 200.

Redbubble Ltd (ASX: RBL)

The Redbubble share price fell 23% today after revealing a trading update as well as a strategy shift.

Redbubble noted that its business is seasonal when delivering its third quarter numbers.

Marketplace revenue went up 54% to $103.4 million and gross profit grew 55% to $39.8 million. EBITDA rose $8.5 million to $2.2 million and earnings before interest and tax (EBIT) climbed 91% to a loss of $0.9 million.

Redbubble is determined to create the world’s largest marketplace for independent artists and it’s going to invest heavily to do so. The company believes that it has an enormous addressable market with consumer goods. It sees tremendous potential benefits from growing the business over the medium and long term.

The new ASX 200 share wants to generate a lot of revenue growth, with a target of $1.25 billion of marketplace revenue over the medium-term.

It’s going to invest, but this is going to mean that the EBITDA margin (of marketplace revenue) will remain in the mid single digit range over an annual period.

When it reaches $1.25 billion of marketplace revenue, it expects to generate EBITDA margins of 10% to 15%.

Australian Pharmaceutical Industries Ltd (ASX: API)

The API share price fell over 1% after the business announced its FY21 half-year result.

COVID-19 has impacted its CBD and large shopping centre stores, causing a decline in foot traffic and sales.

Total revenue was down 2.6% to $2 billion. EBIT dropped 25.2% to $29.4 million and net profit after tax (NPAT) fell 29.3% to $15.9 million.

The business has been working on reducing costs and investing in online capabilities. It’s also opening new Clear Skincare clinics to fuel future growth.

API’s board decided to pay a dividend of 1.5 cents per share. This was an increase from last year where no dividend was paid due to COVID-19.

The pharmacy business said that it remains confident about the growth potential of its two retail businesses and the reliability of its pharmacy distribution cash-generating business.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 recovers, Redbubble sinks, Megaport jumps appeared first on The Motley Fool Australia.

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